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HomeMy WebLinkAbout2011-11-28 12-017 ORDERCOUNCIL ACTION Item No. 12 017 Date: 11/28/2011 Item/Subject: Order, Authorizing Refinancing of Certain of the City of Bangor's Existing Bond Obligations and the Issuance of the City's General Obligation Refunding Bonds and a Tax Levy Therefor Responsible Department: Finance Commentary: The attached order would authorize the issuance of $5,347,300 general obligation bonds to refinance previously issued debt ($5,230,000 in outstanding 2002 bonds, $117,300 to finance the cost of issuance which includes $52,300 in premiums to bondholders). Additionally, as the short term municipal bond market remains favorable, the City anticipates issuing a total of approximately $6,525,000 of 10 year debt in January. The rest of the financing has been previously approved in separate bond orders to finance current capital improvements. Based on current market conditions, the City anticipates realizing significant savings over the remaining life of the debt. The City's financial advisor has indicated that we can expect an interest rate of approximately 2.5% on the new issue compared to the rates currently carried by the existing debt of 4.20% to 4.75%. By taking advantage of the current interest rate environment, it is anticipated that this refinancing will result in interest cost savings over the next 10 years of approximately $500,000 within the General Fund, School Department, and Sewer and Parking Funds combined. Department Head Manager's Comments: This item will require a Public Hearing on 1}2/12/11 J City Manager Associated Information: Order Budget Approval: Finance Director Legal Approval: r City Solicitor Introduced for Passage x First Reading Page _ of _ X Referral — Finance Committee of 12/5/11 12 017 Assigned to Councilor _ Durgin November 28, 2011 CITY OF BANGOR (TITLE.) Order, Authorizing Refinancing of Certain of the City of Bangor's Existing Bond Obligations and the Issuance of the City's General Obligation Refunding Bonds and a Tax Levy Therefor WHEREAS: on or about January 31, 2002, the City of Bangor issued its general obligation bonds in the original stated principal amount of $11,025,000 to finance the costs of certain capital improvement and in furtherance of other municipal purposes (the "Prior Bonds'); and WHEREAS; due to the drop in available interest rates, the City desires to refund and refinance a portion of the Prior Bonds through issuance of its general obligation refunding bonds; Now therefore, by the City Council of the City of Bangor be it hereby ORDERED. THAT Pursuant to 30 A M.R.S.A. §5772, Section 13 of Article VI of the City Charter (Private and Special Laws of 1931, Chapter 54) and all amendments thereof and acts additional thereto, and all other authority thereto enabling, there is hereby authorized the issue and sale at one time and from time to time up to Five Million Three Hundred Forty Seven Thousand Three Hundred Dollars ($5,347,300) aggregate principal amount of general obligation bonds of the City of Bangor. The proceeds derived from the sale of said bonds, including premium, if any, may be used and are hereby appropriated to refund the Prior Bonds, to pay redemption premium thereon, if any, interest accrued and unpaid to the redemption date and issuance costs with respect thereto. THAT the date, maturities (not to exceed the maximum term permitted by law), denominations, interest rate or rates, place of payment, and other details of said bonds, including the timing and provision for their sale and award shall be determined by the Finance Director with the approval of the Finance Committee. THAT the bonds hereby authorized may be made subject to call for redemption, with or without a premium, before the date fixed for final payment of the bonds, as provided in 30 A M.R.S.A. §5772(6), as amended, as shall be determined by the Finance Director with the approval of the Finance Committee. THAT said bonds shall be signed by the Finance Director, countersigned by the Chair of the City Council, sealed with the seal of the City, attested by its Clerk, and that said bonds shall be in such form and contain such terms and provisions not inconsistent herewith as they may approve, their approval to be conclusively evidenced by their execution thereof. Any issue of bonds may be consolidated with and issued at the same time as any other issue of bonds W2746002.1 1 12 017 authorized prior to their issuance, and the bonds may be divided into multiple series and issued in separate plans of financing, with the approval of the Finance Committee THAT in each of the years during which any of the bonds are outstanding, there shall be levied a tax in an amount that, with other revenues, if any, available for that purpose, shall be sufficient to pay the interest on said bonds, payable in such years, and the principal of such bonds maturing in such years. THAT pursuant to 30 A M.R.S.A. §5772, Section 15 of Article VI of the City Charter and any other authority thereto enabling, the Finance Director, with approval of the Finance Committee is hereby authorized to issue temporary notes of the City in anticipation of the forgoing bond issue, said notes to be signed by the Finance Director, countersigned by the Chair of the City Council, sealed with the seal of the City, attested by its Clerk, and otherwise to be in such form and contain such terms and provisions including, without limitation, maturities (not to exceed 3 years from the issue date), denominations, interest rate or rates, place of payment, and other details as they shall approve, their approval to be conclusively evidenced by their execution thereof. THAT the bonds and notes shall be transferable only on the registration books of the City kept by the transfer agent, and said principal amount of the bonds and notes of the same maturity (but not of other maturity), upon surrender thereof at the principal office of the transfer agent, with a written instrument of transfer satisfactory to the transfer agent duly executed by the registered owner or his or her attorney duly authorized in writing. THAT the Finance Director and Chair of the City Council from time to time shall execute such bonds or notes as may be required to provide for exchanges or transfers of bonds or notes as heretofore authorized, all such bonds or notes to bear the original signature of the Finance Director and Chair of the City Council, and in case any officer of the City whose signature appears on any bond or note shall cease to be such officer before the deliver of said bond or note, such signature shall nevertheless be valid and sufficient for all purposes, the same as if such officer had remained in office until delivery thereof. THAT upon each exchange or transfer of bonds or notes, the City and transfer agent shall make a charge sufficient to cover any tax, fee, or other governmental charge required to be paid with respect to such transfer or exchange, and subsequent to the first exchange or transfer, the cost of which shall be borne by the City, the cost of preparing new bonds or notes upon exchanges or transfers thereof shall be paid by the person requesting the same. THAT in lieu of physical certificates of the bonds and notes hereinbefore authorized, the Finance Director be and hereby is authorized to undertake all acts necessary to provide for the issuance and transfer of such bonds and notes in book -entry form pursuant to the Depository Trust Company Book -Entry Only System, as an alternative to the provisions of the foregoing paragraphs regarding physical transfer of bonds, and the Finance Director be and hereby is authorized and empowered to enter into a Letter of Representation or any other contract, agreement or understanding necessary or, in her opinion, appropriate in order to qualify the bonds for and participate in the Depository Trust Company Book -Entry Only System. THAT the bonds and notes issued in anticipation thereof be issued an either a taxable or a tax-exempt basis, or a combination thereof, as determined by the Finance Director, with the approval of the Finance Committee. (W 2746002 11 12 01:7 THAT, if the bonds or notes, or any part of them are issued on a tax exempt basis, the officers executing such bonds or notes be and hereby are individually authorized and directed to covenant and certify on behalf of the City that no part of the proceeds of the issue and sale of the bonds or notes authorized to be issued hereunder shall be used directly or indirectly to acquire any securities or obligations, the acquisition of which would cause such bonds or notes to be "arbitrage bonds" within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended (the "Code'. THAT, if the bonds or notes, or any part of them, are issued on a tax exempt basis, the officers executing such bonds or notes be and hereby are individually authorized to covenant and agree, on behalf of the City, for the benefit of the holders of such bonds or notes, that the City will file any required reports and take any other action that may be necessary to ensure that interest on the bonds or notes will remain exempt from federal income taxation and that the City will refrain from any action that would cause interest on the bonds or notes to be subject to federal income taxation. THAT, if the bonds or notes, or any part of them, are issued on a tax exempt basis, the Finance Director be and hereby is authorized and empowered to take all such action as may be necessary to designate the bonds or notes as qualified tax-exempt obligations for purposes of Section 265(b) of the Code; it being the City Council's intention that, to the extent permitted under the Code, the bonds or notes be Section 265(b) designated and that the Finance Director with advice of bond counsel, make the required Section 265(b) election with respect to such bonds to the extent that the election may be available and advisable as determined by the Finance Director. THAT the officers executing the bonds or notes be and hereby are individually authorized to covenant, certify, and agree, on behalf of the City, for the benefit of the holders of such bonds or notes, that the City will file any required reports, make any annual financial or material event disclosure, and take any other action that may be necessary to ensure that the disclosure requirements imposed by Rule 15c2 12 of the Securities and Exchange Commission, if applicable, are met. THAT the investment earnings on the proceeds of the bonds, if any, and the excess proceeds of the bonds (including premium), if any, be and hereby are appropriated for the following purposes: 1. To any costs incurred to refund the Prior Bonds; 2. If the bonds are issued on a tax exempt basis, in accordance with applicable terms and provisions of the Arbitrage and Use of Proceeds Certificate delivered in connection with the sale of the bonds including, to the extent permitted thereunder, to the City's General Fund; 3. To pay debt service on the bonds. THAT the Finance Director, Chair of the City Council, Clerk, and other proper officials of the City be, and hereby are, authorized and empowered in its name and on its behalf to do or cause to be done all such acts and things, and to execute, deliver, file, approve, and record all such financing documents, contracts, agreements, deeds, assignments, certificates, memoranda, abstracts, and other documents as may be necessary or advisable, with the advice of counsel for the City, to carry out the provisions of the resolutions heretofore adopted at this meeting in connection with the Projects, the issuance, execution, sale, and delivery by the City I W 2746002 11 12 017 of the bonds and notes and the execution and delivery of the documents, including the entering into of a Loan Agreement with the Bond Bank, as may be necessary or desirable. THAT if the Finance Director, Chair of the City Council, or Clerk are for any reason unavailable to approve and execute the bonds or any related financing documents, the person or persons then acting in any such capacity, whether as an assistant, a deputy, or otherwise, is authorized to act for such official with the same force and effect as if such official had himself or herself performed such act. THAT if any of the officers or officials of the City who have signed or sealed the bonds and notes hereinbefore authorized shall cease to be such officers or officials before the bonds or notes so signed and sealed shall have been actually authenticated or delivered by the City, such bonds or notes nevertheless may be authenticated, issued, and delivered with the same force and effect as though the person or persons who signed or sealed such bonds notes had not ceased to be such officer or official; and also any such bonds or notes may be signed and sealed on behalf of the City by those persons who, at the actual date of the execution of such bonds or notes, shall be the proper officers and officials of the City, although at the nominal date of such bonds or notes any such person shall not have been such officer or official. THAT during the term any of the bonds are outstanding, the Finance Director is hereby authorized, in the name and on behalf of the City, to issue and deliver refunding bonds on either a current or advance refunding basis, to refund some or all of the bonds then outstanding, and to determine the date, form, interest rate, maturities (not to exceed 30 years from the date of issuance of the original bonds) and all other details of such refunding bonds, including the form and manner of their sale and award. The Finance Director is hereby further authorized to provide that any of such refunding bonds hereinbefore authorized be made callable, with or without premium, prior to their stated date(s) of maturity, and each refunding bond issued hereunder shall be signed by the Finance Director, countersigned by the Chair of the City Council, sealed with the seal of the City, attested by its Clerk. I W 2746002 11 IN CITY COUNCIL November 28, 2011 First Reading S Referral to Finance Committee of 12/5/11 IN CITY COUNCIL December 12, 2011 Motion Made and Seconded to Open the Public Hearing Public Hearing Opened No one from the public came forward Motion Made and Seconded to Close the Public Hearing Public Hearing closed Motion Made and Seconded for Passage Passed # 17-017 ORDER (TITLE,) Authorizing Refinancing of Certain of the City of Bangor's Existing Bond Obligations and the Issuance of The City's General Obligation Refunding bonds and A Tax Levy Therfor Assigned to Councilor t-_;�-Orr, CITY OF BANGOR, MAINE NOTICE OF PUBLIC HEARING Notice is hereby given that the Bangor City Council will hold a public hearing at 7:30 p.m., December 12, 2011 at City Hall, 73 Harlow Street, Bangor, Maine on the proposed issuance of 5,347,300 of bonds to refinance the City's previously issued and outstanding 2002 general obligation bonds. All persons who desire to be heard on the proposed borrowing are invited to attend the public hearing. The City Council will consider action authorizing the bonds immediately following the public hearing. Copies of the proposed order will be on file and may be reviewed at the office of the City Clerk prior to said public hearing. To be posted in two or more public places and published in a newspaper published in Bangor not less than 10 days prior to final action by the City Council. CITY OF BANGOR, MAINE NOTICE OF PUBLIC HEARING Notice is hereby given that the Bangor City Council will hold a public hearing at 7:30 p.m., December 12, 2011 at City Hall, 73 Harlow Street, Bangor, Maine on the pro- posed issuance of 5,347,300 of bonds to refinance the City's previously issued and outstanding 2002 general obligation bonds. All persons who desire to be heard on the proposed borrowing are invited to at- tend the public hearing. The City Council will con- sider action authorizing the bonds immediately follow- ing the public hearing. Copies of the proposed or- der will be on file and may be reviewed at the office of the City Clerk prior to said public hearing. Nov. 28, 2011 (W2746255.1)